ING battles Commission
Dutch government and ING take on EU competition authorities over terms set for bank rescue plan.
The Dutch government and ING today launched a joint legal appeal against restructuring measures imposed on the bank by the European Commission.
ING said in a statement that the Commission had incorrectly assessed the amount of aid the bank had received from the Dutch state during the financial crisis. It said that this “could hamper discussions” between ING and the Dutch government on repayment of a set of financial instruments known as core tier 1 securities, something that the Commission demanded when it approved a restructuring plan agreed upon by ING and the Dutch government.
Restructuring requirement
The bank said it also disputes a requirement in the restructuring plan that it refrain from exercising price leadership on the market. The plan bans ING from offering the best prices on the market for three years, or until it has paid back a €10 billion capital injection from the Dutch state (whichever time limit is shorter).
ING said it was “appealing against the disproportionality of the price leadership restrictions”.
The bank said that it was not contesting other parts of the restructuring plan, such as a requirement to sell off its insurance business.
The appeal has been lodged with the General Court of the European Union (formerly known as the Court of First Instance).
Confident Commission
“The Commission is confident that the decision it took on ING was 100% water-tight from a legal point of view,” said a spokesman for Neelie Kroes, the European commissioner for competition.
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“Pending appeal, the Commission’s decision must be respected and is fully applicable,” he added.
Kroes said when the Commission approved the restructuring plan for ING in November that the proposal would prevent the bank from gaining an unfair advantage from aid it had received during the financial crisis.
The aid provided by the Dutch state to ING during the crisis included a €10bn capital injection, €12bn of liquidity guarantees, and an illiquid asset insurance scheme covering 80% of a $39bn (€27.90bn) portfolio.